Question:
A company has three products and three main departments that consume resources: Design, production and quality assurance. The following information was collected for the three departments:
|
|
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Use of Cost Driver by Product
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Department
|
Cost Driver
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Variable Manufacturing Overhead
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Product A
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Product B
|
Product C
|
|
Design
|
Consultant Hours
|
$54,000
|
20
|
15
|
5
|
|
Production
|
Machine Hours
|
$183,000
|
425
|
400
|
375
|
|
Quality Assurance
|
Tests
|
$75,000
|
30
|
8
|
2
|
|
Total
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$312,000
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|
|
|
Compute the manufacturing overhead allocated to each product for the year using the simple costing system using machine hours as the allocation base.
Compute the manufacturing overhead allocated to each produce for the year using the department-based manufacturing overhead rates.